Rich married wife Zijin mining, a number of financial indicators have been red light

“Once I thought marriage was not a necessity. It was not until I met Mr. Chen that I believed in love. We wanted to use a marriage to prove that true love can cross and break through the boundaries of age.”. This is a wedding dialogue on the Internet recently. One of the protagonists of the event is Chen Jinghe, chairman of Zijin Mining (601899. SH), which has a total market value of more than 150 billion yuan. He married his second wife, 25 years younger, at the end of the National Day holiday. < / P > < p > < p > “the rich marry a lovely wife” is always a topic of discussion. This time, netizens talked about not only the age difference of 25 years between the two, but also the bride’s love and the 100 billion Zijin mining industry run by Chen Jinghe. < / P > < p > according to public information, Zijin mining, with a market value of more than 150 billion yuan, is the largest non-ferrous metal company and the largest gold company in China, ranking 77th among the Fortune 500 in 2020. At present, Chen Jinghe holds 76.05 million shares of Zijin Mining (including 15 million H shares), with a market value of about 440 million yuan according to the latest stock price calculation. Prior to that, on July 27, he also transferred his 51 million A-share shares of Zijin Mining to his son in a non trading way, which is currently worth 310 million yuan. From an unknown small mine to the largest gold mine in China, Zijin mining industry can not do without the leadership of Chen Jinghe. However, the current Zijin mining industry is full of hidden dangers. The year-on-year growth rate of net profit attributable to the parent company has dropped to single digit, and the gross profit rate has also declined for two and a half years. At the same time, the short-term debt to cash ratio is less than 0.4, resulting in great short-term debt repayment pressure. To make matters worse, the company’s largest overseas gold mine is also facing the risk of decommissioning. < p > < p > < p > according to the annual report of Zijin mining, the company is a large multinational mining group, mainly engaged in the exploration and development of gold, copper, zinc and other mineral resources around the world, moderately extending smelting processing and trading business, etc., and has a relatively complete industrial chain. According to the financial report, Zijin Mining has important mining investment projects in 14 provinces (regions) and 11 overseas countries, mainly including the Zijinshan Gold Copper Mine, Heilongjiang Duobaoshan copper mine and other 14 major domestic mines in production, as well as 8 overseas large-scale production mines such as bogla gold mine in Papua New Guinea and koluwezi copper cobalt mine in Congo (gold). The main revenue source of Zijin mining industry is the mining, smelting, refining and sales of gold, copper and zinc ores, of which gold and copper related operations account for more than 80% of its total revenue. As of June 30, this year, the company controlled 11 gold mining companies and 7 copper mine companies at home and abroad. < p > < p > < p > < p > according to investor.com, Zijin Mining has started an extensive development strategy through overseas M & A since 2011, and has successfully launched 11 overseas mineral capital companies in the past nine and a half years. < / P > < p > these overseas mergers and acquisitions of mining companies have effectively increased the company’s revenue scale: from 78.85 billion yuan in 2016 to 136.2 billion yuan in 2019; the net profit attributable to the parent also increased from 1.699 billion yuan in 2016 to 4.284 billion yuan. However, since 2017, the growth rate of net profit attributable to parent of Zijin Mining Co., Ltd. has rapidly declined. In 2018, the year-on-year growth rate of net profit attributable to parent decreased to 16.71% compared with 90.66% in 2017, and this data fell below double digits in 2019. < / P > < p > in particular, in the past 2019, under the background that the company’s revenue decline was not obvious, the cliff like decline in net profit attributable to the parent company was unthinkable. According to the annual report of Zijin Mining in 2019, the investor website found that the three data of “investment income”, “investment income / (loss)” and “income from changes in fair value” in the comprehensive income statement of Zijin Mining in 2019 showed the most obvious year-on-year decrease. < / P > < p > compared with the previous year, the three data decreased by 1.363 billion yuan, accounting for 31.8% of the net profit attributable to the parent company in 2019. Among them, the largest decrease compared with the same period was investment income, with a decrease of 1.026 billion yuan. The company’s financial report explained that: the long-term equity investment income calculated by equity method, the investment income obtained from the disposal of financial assets and financial liabilities measured at fair value with their changes included in the current profit and loss, and the investment income generated by remeasuring the long-term equity investment was caused by a year-on-year decrease. < / P > < p > under the guidance of the extension development strategy, Zijin Mining’s production capacity has been continuously improved. According to investor.com, in the past three years from 2017 to 2019, Zijin Mining’s output of mineral gold, mineral copper and mineral zinc was 3748t, 208000 T and 270000 T, respectively, which increased to 4083t, 369900 T and 374100 T, with an increase of 8.9%, 77.8% and 38.6% respectively. However, it is worrisome that the company’s overall gross profit margin has declined for two and a half years, and further dropped to 10.97% in the first half of 2020, which is the new low in the past four years. The decline of gross profit rate mainly comes from two factors: the rising of cost and the reduction of product price and the resonance effect of both. < p > < p > < p > when reviewing Zijin Mining’s comprehensive income statement in the past two and a half years, the company’s overall gross profit rate fell by 1.35 PCT in 2018, mainly due to the increase in the cost of mineral products. In 2019, the company’s gross profit rate fell by 1.19 PCT, mainly due to the price drop of mineral copper and zinc. This means that Zijin’s gross profit rate is affected by many complicated and changeable factors, among which the grade of mined ore and the price fluctuation of precious metal futures are very important. Of course, the fluctuation of gross profit rate is also an important reason for the precipitous decline in the year-on-year growth rate of the company’s return to parent company. < p > < p > < p > < p > by combing the balance sheet of Zijin mining, it is found that the company’s overall debt level hovers around 60% in the five quarters from June 30, 2019 to June 30, 2020, which is higher than other domestic listed precious metal companies. < / P > < p > it is worth noting that Zijin Mining’s cash short-term debt ratio is extremely low, less than 0.5 in the past five quarters, which leads to its short-term (within one year) repayment gap hovering at a high level. < p > < p > < p > < p > further excavation found that in the current assets, Zijin Mining turned more money into inventory, among which the inventory accounted for 47% of current assets in the first half of 2020, which means that the company’s short-term repayment ability largely depends on the turnover efficiency of inventory. However, Zijin Mining has a high inventory turnover rate. In the second quarter of 2020, the company’s inventory turnover rate was 4.55, and the average annual inventory turnover days was 19.7 days, which reduced the company’s short-term repayment pressure to a certain extent. < / P > < p > as mentioned above, Zijin Mining’s overseas M & A expansion has greatly expanded the company’s revenue scale, but due to the renewal of contract due to expiration, it has brought certain operational risks. The extension and renewal of bogera, the largest overseas gold mine, is an example. Until the new mining right of Papua New Guinea (hereinafter referred to as “the new mining right”) of Papua New Guinea (hereinafter referred to as the “new mining right”) can be extended until August 2019, when the new mining right of Papua New Guinea (hereinafter referred to as “the new mining right”) is expired. However, in April this year, the PNG government decided not to approve the bogla mining right extension application, and decided to nationalize the bogla gold mine ownership, citing the negative social, environmental and economic effects caused by the mine. On September 25, the Supreme Court of Papua New Guinea rejected the application for renewal of the mineral rights of the local Bogra gold mine by Barik New Guinea company (a joint venture of Zijin Mining and Barrick gold company in PNG). On September 30, the Prime Minister of PNG, James malap, said in a statement, “I urge Barrick (Zijin mining joint venture) to be humble and abide by the rule of law”, which has sharply increased the risk of decommissioning the Bogra gold mine. < / P > < p > accounted for 21.6% of the total output of Zijin Mining and contributed 526 million yuan of net profit, accounting for 12.3% of the total net profit of the company. Zijin’s shares fell as much as 9.44% in a single day after the news that the company refused to apply for an extension on April 27. Although Zijin Mining Co., Ltd. acquired 100% equity of mainland gold in December last year, the wulitika gold mine project under mainland gold has been put into operation in the first half of 2020, but it has not yet reached the state of full production. < / P > < p > in addition, the aurora gold mine of Guyana gold field, which was fully purchased by the company in June this year, has completed the delivery in August. The average annual gold production of the mine in the past four years was 4.6 tons. However, due to the epidemic situation and shortage of funds, Zijin Mining’s gold production capacity is facing the risk of decline in the short term due to many factors. (produced by thinking Finance) – < / P > < p > Disclaimer: the purpose of reprinting this article is to convey more information and does not represent the views and positions of this website. The content of this paper is for reference only and does not constitute investment advice. Investors operate accordingly and bear their own risks. < p > < p > Chinanet is a national key news website under the leadership of the Information Office of the State Council and managed by China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website releases information 24 hours a day, which is an important window for China to carry out international communication and information exchange.